The Brazilian trade balance registered growth in the volume of exports in May, despite the adverse scenario in the global economy. The exported volume, measured by the quantum index, increased by 5.6% in relation to May 2019, according to preliminary data released this Monday (1/6) by the Foreign Trade Secretariat (Secex) of the Ministry of Economy (ME). Year-to-date, the increase in sales abroad was 1.7% compared to the same period of the previous year.
This good performance in May was determined by the increase of 36.1% in the volume of exports from the agricultural sector, according to the quantum index, due to the country's strong competitiveness in exports of this category of goods, added to the high global demand, especially Asian demand. In the year, the growth in agricultural exports was 19.9% in quantum.
“It can be seen that demand from Asian countries for Brazilian products continues to be strong. For that continent, there was an increase in the exported value of 27.7% in the month and 16.8% in the year to date”, commented the Secretary of Foreign Trade of the ME, Lucas Ferraz. He adds that the good export performance of agribusiness has offset the decline observed in exports of industrialized products, providing resilience to the national export sector and contributing to a less pronounced drop in domestic activity, in a context of progressive decline in global GDP.
In addition to the increase in export volume, Brazil achieved a historic record for May in shipments of soybeans (15.5 million tons), crude oil (8.4 million tons), sugar and molasses (2.7 million tons), soybean meal (2 million tons), fuel oils (1.6 million tons), alumina (789 thousand tons), poultry meat (373 thousand tons), beef (155 thousand tons) and coffee (216 thousand tons). “It is worth highlighting that Oil, sugar, soybean meal, coffee and beef were monthly records, not only for the months of May, but for any month in the historical series”, highlights Ferraz.
Current and commercial balance
In terms of values, the trade flow in the month reached US$ 31.3 billion, with a decrease of 3.1% in relation to the daily average of May 2019. The trade balance was US$ 4.5 billion, a decrease of 11. 1% compared to the average for May last year, resulting from a drop of 1.6% in imports and 4.2% in exports in the month.
The moderate drop in imports in May was mainly influenced by nationalization operations of two oil platforms, with a total value of US$ 2.7 billion. These operations occur due to the migration from the Reptro special customs regime to the “Reptro-Sped” special customs regime. The new regime, implemented in 2018, determines that equipment temporarily admitted for import, with charter and rental payments, be nationalized. “Excluding the acquisitions of platforms in the total imported value, it is observed that imports in May decreased by 21.7% by the daily average in relation to May 2019. The trade balance, excluding the 'platform effect', grew by 42 .4% in May based on the daily average. The trade flow, excluding the same effect, fell by 11.5%”, highlighted the secretary.
In exports, the daily average in May was US$ 897 million, a value 4.2% lower than the average in May 2019. According to Secex, the drop in exported value was a direct result of the strong decline in international prices, due to the weakening of global demand, reducing the prices of goods exported by Brazil by 15.6%, compared to the same month of the previous year.
However, in relation to the exported value, there was also a record for May in soybeans (US$ 5.1 billion), beef (US$ 683 million), gold (US$ 411 million), pork (US$ 215 million), starches (US$ 53 mi) and rice (US$ 32 mi). “Beef and pork are monthly records for any month in the historical series”, recalls Ferraz.
YTD
Despite the volume exported by the Brazilian economy growing by 1.7% in the first five months of the year, according to the quantum index, the country felt a drop of 5.3% in traded prices, as a result of the slowdown in the global economy. Therefore, the exported value fell by 4.5% from January to May, to US$ 85.3 billion.
As a result of the values exported and imported in the year, Brazilian trade flow decreased by 2.8%, reaching US$ 154.3 billion in the period. Brazil's trade balance, given the greater drop in export values in relation to the drop in imports, decreased by 17.9% in relation to the balance of the first five months of 2019, reaching US$ 16.4 billion in the year.
Secretary Lucas Ferraz explains that, excluding the “platform effect” and the weight that these goods have on the year's results, exports would fall by 3.1% instead of the recorded drop of 4.5%, according to the daily average, in relation to the same period last year. Imports would fall by 6.9%, with a drop of 7.6% in imports of capital goods. The trade flow, in this case, would decrease by 4.8%, and the trade balance would increase by 9.3% in the year to date.
Expectations for 2020
Secex maintains the projection for the result of the trade balance in 2020 released at the beginning of May. The expectation for the year is that exports will total US$ 199.8 billion, a drop of 11.4% in relation to the 2019 result, of US$ 225.4 billion. Imports, in turn, should end the year with US$ 153.2 billion, a reduction of 13.6% in relation to US$ 177.3 billion in 2019. The trade balance should be US$ 46.6 billion and the trade flow , from US$ 353 billion.
“We understand that, for now, there has been no change in the fundamentals that justifies changes in projections for the end of the year,” said Ferraz. The next revision of the projection will be made together with the announcement of monthly preliminary data for June.
Source: DATA
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